Creates A Leading PET Player in Middle East and Africa - IVL to Acquire PET Plant in Egypt - Indorama Ventures
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IVL to Acquire PET Plant in Egypt
Creates A Leading PET Player in Middle East and Africa
June 15, 2018
Disclaimer
This presentation contains “forward-looking” statements of Indorama Ventures Public Company Limited (the “Company”) that
relate to future events, which are, by their nature, subject to significant risks and uncertainties. All statements, other than
statements of historical fact contained herein, including, without limitation, those regarding the future financial position and
results of operations, strategy, plans, objectives, goals and targets, future developments in the markets where the Company
participates or is seeking to participate and any statements preceded by, followed by or that include the words “target”, “believe”,
“expect”, “aim”, “intend”, “will”, “may”, “anticipate”, “would”, “plan”, “could”, “should, “predict”, “project”, “estimate”, “foresee”,
“forecast”, “seek” or similar words or expressions are forward-looking statements.
Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the
Company’s control that could cause the actual results, performance or achievements of the Company to be materially different from
the future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking
statements are based on numerous assumptions regarding the Company’s present and future business strategies and the
environment in which the Company will operate in the future and are not a guarantee of future performance.
Such forward-looking statements speak only as at the date of this presentation, and the Company does not undertake any duty or
obligation to supplement, amend, update or revise any such statements. The Company does not make any representation, warranty
or prediction that the results anticipated by such forward-looking statements will be achieved.
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Transaction Highlights
Acquisition
• IVL has signed definitive agreements to acquire up to 50% of the Equity stake of PET plant in Egypt (EIPET)
and entered into a 50% Joint Venture partnership with Dhunseri
• 540 KMT brand new, sparsely run plant to become amongst IVL’s best cost facilities in terms of scale,
technology and energy costs. The addition of EIPET will increase IVL’s existing global PET capacity by 10%.
• Strategically located in Ain Sokhna free trade zone with zero corporate tax rate and advantaged logistics
Strategic Rationale
• Restart serves growing need for sustainable packaging in Egypt and in the region, ~7% demand CAGR
• Duty free access to key Western markets currently facing critically low supply due to Corpus Christi delay
• Indorama Ventures Portugal PTA will ensure feedstocks for EIPET with short transit times
• Focus on balancing market need for recyclable PET packaging supply chain with reliable manufacturing
Transaction Highlights
• The transaction takes place with immediate effect
• Restart activities for manufacturing recyclable PET has commenced and PTA will be shipped from IVL
Portugal soon after restart of Portugal PTA production anticipated in early July 2018
• 100% consolidated accounting with minority interest
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Strong Project and M&A Pipeline
Acquisitions Announced Since IVL Capital Markets Day in February 2018
Mar 16, 2018 Mar 21, 2018 May 13, 2018 June 15, 2018
Brazil PET Corpus Christi JV PET-PTA Avgol HVA Hygiene Fabrics Egypt PET
Geographical diversification Scale with advantaged Earnings diversification in Geographical diversification
with strong position in South integration in a sector desiring a consolidated Personal with a strong position
America more supply Hygiene fiber business in Africa
The transaction takes
Completed Expected closing Expected closing
place with immediate
May 24, 2018 in 2H18 in 2H18 effect
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Brazil and Egypt - Consistent Delivery on PET Consolidation Strategy
Scale Enhancement, Cost Savings, Geographical Reach, Earnings Diversification
Global Scale Beyond Compare
Brazil and Egypt to Contribute
Significantly to IVL’s PET Portfolio 5,938 Top-10 Global PET Producers – 2018 Capacity (KMT)
+22%
540 5,938 IVL Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9
550
Balanced and Diversified PET Portfolio
4,848
Egypt
Brazil PET
Americas EMEA Asia
PET
IVL PET Capacity (KMT) 2,036 2,019 1,883
% of total 34% 34% 32%
+1,090 KMT
Countries 3 7 4
Operating Sites 5 7 10
Top Positions Across All Regions
Before Post #1 in EMEA
#1 #2
#2 in North America
Acquisitions IVL PET Capacity (KMT) Acquisitions #1 in Africa
#1 #2 in South America
#1 in Asia
Note: IVL capacity includes 100% JV
Source: Industry Data, IVL, IVL Analysis
5
Egypt PET - Attractive Acquisition Opportunity
Becoming A Leading PET Producer in the Middle East and Africa
Ain Sokhna, Egypt
Egypt PET
Nigeria PET
Strategically located in Ain Sokhna
free trade zone with zero corporate tax ü Large domestic market and duty free ü Duty free access to key Western
rate and advantaged logistics access to North and East Africa through markets currently facing critically low
Brand new, sparsely run plant with
COMESA1 and GAFTA2 supply due to Corpus Christi delay
capacity of 540 KMT ü Same technology as deployed at IVL
ü Allows IVL to source internal PTA from
Complementary to IVL Nigeria PET Dhunseri leveraging on IVL’s proven
Asia and Portugal and IPA from Spain
operating and integration skills
1. Common Market for Eastern and Southern Africa
2. Greater Arab Free Trade Area
6Our Roadmap for Organic Growth IVL ay
m
Expected EBITDA Growth with Approved Projects p fro kets D
c a r 8
Re al Ma y 201
pit ar
Ca ebru
2015 to 2019 EBITDA ($M) F
+57%
EBITDA 1,004
Growth
Delivered
640
501 +45%
Feedstock
197 EBITDA
Fibers 208 Increase
195
PET 296
247
2015 2017 Volume Margins, Costs and Ongoing Projects 2019F
Mix
EBITDA ($/MT) 91 110 Increased
Net Op Existing Business
Debt/Equity 0.81x 0.54x 15%
Note: 2019F over 2017 as per management best estimates and may change materially if
there are changes in underlying assumptions due to external or internal reasons 7Robust Balance Sheet to Fund Strategic Aspirations
$7b Investment Headroom 2018-21 in Addition to $1b on Ongoing Projects m IVL ay
p fro kets D
c a r 8
Re al Ma y 201
pit ar
2017 to 2021 Net Debt to Equity Bridge Ca ebru
F
$7B
~1.0x
0.75x
0.54x
$764M
~0.2x
Dec 31, 2017 Net Ongoing Projects Dec 31, 2017 Net Free Cash Flow in Estimated Dec 31, Capex Headroom Estimated Dec 31,
D/E CAPEX Dec 17 Op. D/E 2018 & 19 based 2019 Net D/E from 2018 to 2021 Net D/E
on ongoing 2021
projects
Headroom Includes Announced Acquisitions Not Yet Completed
Note: 100% IVL W2 exercise considered, budgeted business plan 8IVL - On Track to Deliver Long-Term Value
$941m Strong
+57% +45% $7B+$1B 1Q18 LTM projects
EBITDA expected
growth EBITDA Investment Operating and M&A
headroom in Cash Flow
delivered increase in
strengthening
pipeline to
during 2015- 2019 vs 2017 2018-2021 continue to
with ongoing balance
2017 excluding add
capex sheet to
deals sustainable
fund growth
announced earnings
plans
but not closed growth
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